CURT NICKISCH: Welcome to the HBR IdeaCast from Harvard Business Review. I’m Curt Nickisch.
In 1983, Malinda Chouinard parked a trailer in front of Great Pacific Iron Works in Ventura, California. It was for the chief of marketing to nurse her colicky baby. The next year, the trailer was driven away and replaced with a room with toilets and sinks sized for children. The year after that came the first full-time teacher. Ever since, that company has had onsite childcare at its headquarters. And today, you know that company as the one it grew into, the outdoor retailer, Patagonia. The company estimates that it recoups more than 90% of the cost through tax refunds, decreased turnover and increased engagement. Work-life support programs have always been known to lower turnover and raise employee loyalty, but new research shows they also have a positive effect on promoting diversity among managers at those firms, in effect, that it’s even stronger than some popular racial equity programs.
Here to tell us more about this is Alexandra Kalev, she chairs the Department of Sociology and Anthropology at Tel Aviv University. And with Harvard sociologist, Frank Dobbin, she wrote the HBR article, “The Surprising Benefits of Work/Life Support. Alexandra, thanks for coming on the show.
ALEXANDRA KALEV: Thanks for having me.
CURT NICKISCH: Now, you have a background here in sociology and ethnography, why is that lens useful in these kinds of business problems?
ALEXANDRA KALEV: That’s a great question. Your question reminds me of a student I had many years ago. She came from business school, from finance, she wanted to do a Master thesis with me just out of the blue sky. She wanted to learn how companies calculate the cost and benefits of their work-life supports.
I told her, “Forget about it. They don’t calculate.” And she said, “There is no way companies offer leaves, childcare supports without calculating and realizing that it actually benefits them.” So I told her, “Well, companies don’t offer much of this, and when they do, they do it just because of beliefs, because of myth, because of symbols.”
She didn’t believe me. She did her Masters, of course, I was right. She found that companies don’t know how much childcare costs. And you said at the beginning that at Patagonia, they recover 91% of the expenses and I’m so happy that you started with that because companies don’t know much about how little childcare support actually costs and this is why childcare support is very rare. Companies don’t do the math.
CURT NICKISCH: Childcare is one, but what other kinds of work-life support programs did you study?
ALEXANDRA KALEV: So we studied many, but what surfaced as the most important work-life supports are flexibility, time off and childcare policies. I mentioned earlier, myths and symbols and ceremonies. There is a lot of myth and ceremony when it comes to what works in increasing diversity. We wanted to figure out what has worked for corporate America so basically, we created life histories of over 800 American companies, and we are able with these life histories to follow what happens to their managerial workforce after they adopt certain programs.
We looked for the effects of diversity programs. But what we found is that there are other programs that are not part of the diversity battery, but they remove barriers for opportunity, they reduce difficulties that the workers from underrepresented groups face, and because they do that, they increase diversity.
CURT NICKISCH: You’ve used the word myths and symbols, and I’m just curious, what’s an example of a myth or symbol that you’re talking about here?
ALEXANDRA KALEV: In the context of work-life balance, one important myth is who is the ideal worker? One important myth is the meaning of productivity. So how do we measure productivity? How do I know that you are my most productive worker? Is it because I see you from early morning to late at night and you are in all meetings, and I see your car parking in the parking lot? Or is it because the actual products that you deliver?
Well, it turns out that for companies, it’s the former. For many managers, for many companies, in many performance reviews, we know very little about the actual deliverables, about the products of high tech engineers, even of the call center workers, we know much more about the time in their seats, and we confuse the two.
And that myth was created in the 1950s. This is when the model of the White middle class organization was forged in corporate America. That model barely worked back then for Black, Hispanic, and Asian American employees or White women and it rarely works for anyone today. You can imagine how this myth, the myth of time equals productivity, creates a barrier for workers that juggle work-life, right, or work-families.
CURT NICKISCH: So you study these 800 firms. And to be clear, we’re talking about companies in the United States here. Which is important because there obviously is a lot more work-life support or regulated norms for that in other countries. What were some of the most effective ways that companies could offer flexibility that had meaningful impacts for their entire workforce?
ALEXANDRA KALEV: So, yes, flexibility is one of the most impactful programs that we’ve found. And the important thing to remember when offering flexibility is that we want to make this policy formal, well-communicated and flexible.
Different companies, even different departments within the same company have different work processes and different capabilities to afford flexibility. And this puts a lot of management in a stressful position because on the one hand, yes, we know that most employees need more flexibility, on the other hand, managers are worried that they will not be able to manage it. So for example, one manager told me that they have a flexibility policy, but they don’t announce it, nobody knows about it. I asked him, “How come?” And he said, “Well, the minute I announce it, the line will be out the door and down the hallway.” “Okay. Isn’t that what you want? Isn’t that proof that what you’re doing is right?”
“No. I’m afraid I will not be able to manage it. I may not see workers. Workers will not come to the office. I’m afraid I will not be able to manage it.” So that means that managing is seeing, productivity is time stands in the way of many companies and the way they manage flexibility and time off.
So we find that when managers formalize their flextime policies and create a policy where each worker has the right to be granted an arrangement that is relevant to their department, these policies work to remove barriers for success for these workers.
So for example, you cannot expect managers in a hospital to be able to give nurses the same flexibility that in a law firm, they give paralegals or in insurance companies, they give the call center workers. So in a hospital, for example, you can think of giving full benefit or a part-time jobs with benefits with like 20, 24 32 hours. You can think about giving full-time jobs with two weekend, two 12-hour weekend shifts that are parallel to a week long full-time job. These are some of the flextime flexibility policies that work in hospitals.
On the other hand, in insurance firm, call center workers get the flexibility of coming in any time they want between 7:00 AM and 10:00 PM. So you need to think creatively and the company needs to give managers the leeway and the tools to think creatively. The company needs to communicate and demonstrate to managers that it’s okay if the office is empty at 10:00 AM.
So you can see managers as being a little bit between a rock and a hard place, or at least perceiving themselves as being between a rock and a hard place. They need to report upwards, they need to show productivity and they need, again, that productivity from their workers. When they get the support from upper management that flexibility is fine, they can actually pass that support downward to their workers and use that flexibility themselves.
So we have formal policies, clearly communicated granting workers the right to ask and receive an arrangement that works for them in their departments and for their managers. And we have top management support of managers making these arrangements. These are policies that make significant difference in the odds that a woman or a person of color will be able to juggle their work-life needs and do what it takes to advance, to get ahead, to shine, to show that they have the talent, to overcome discriminating encounters and to advance.
CURT NICKISCH: Is the flexibility to work from home something you see as part of this overall flexibility that employers should be working harder to offer?
ALEXANDRA KALEV: Yes, technology allows that flexibility, workers need and want this flexibility. And that’s certainly part of the picture. COVID basically was a lab, right? But we saw that the manager’s greatest fear that out of sight, out of mind, that workers would just not work if they are not in the office totally dissipated, productivity didn’t decline, it even increased during COVID in industries that continued working, of course. And we need to keep that momentum, there is no reason not to. But it started before.
CURT NICKISCH: Yeah, technology to swap shifts has been around.
ALEXANDRA KALEV: It’s a win-win situation because flexibility also increases productivity. When we think about increasing retention and increasing the management diversity, it says something about the numbers, but it also says something about the wellbeing. Large portions of your workers that were under stress, that didn’t feel like they are achieving their full potential, that didn’t have hope maybe, are now doing much better, they’re happier, they have higher job satisfaction and they also perform better and they get promoted, they’re also more productive.
CURT NICKISCH: What did you find in your research about companies that have historically offered family leave? What kind of difference did it make?
ALEXANDRA KALEV: So what we found is that indeed companies that, not only put the leave on the books, because again, that’s the law, most companies have them on the books somewhere, but companies that actually communicate to workers their rights and the way to access their rights and companies that don’t stigmatize workers for taking leaves are those that see workers returning after the leave and again, being productive, being satisfied with their jobs and eventually being promoted to management.
It should be easy. Because of the fear of managing flexible schedules, managing people that are not in the office, there is a lot of resistance. Companies that let go of that resistance, that find solutions where top management actually trains managers in how to find a solution, what to do when someone from your team is going on a leave.
Just last week, a friend told me that her sister in a high tech company went on a family leave for the birth of her child. And her manager gave her entire team bonus for their previous project, but he didn’t give her the bonus. And she asked him, “Why didn’t I get the bonus?” And he said, “Well, I give the bonus to the workers that don’t go on a leave.”
Basically, her manager told her, “I’m disappointed that you took a leave for the birth of your child and I’m not going to reward you. And I now think that you’re a lesser worker.” These companies don’t benefit from having a family leave.
So there are two things here, have a family leaves, communicate it widely and universally, and support your workers on the leave. Don’t send a message that they’re lesser workers because they also wanted to attend their family. It’s legit.
Some big companies recently have picked up on the importance of being generous with time off. So you see Netflix offered salaried workers up to a year of paid leave, and meta. And when Google, Alphabet now, extended it’s 12-week of paid lift to 18, they cut in half the number of new matters that quit. Okay. So they succeed retaining young and motivated workforce. What we find is that, over time, unpaid leave has a positive effect only on the retention of White women possibly because they are the group that can most afford an unpaid leave, right? It’s like 12 weeks or six weeks of no pay.
CURT NICKISCH: Right. So this doesn’t just benefit women, it also has an outsized impact on people of color in your workforce.
ALEXANDRA KALEV: Paid leave, yes. Unpaid leave, less so.
CURT NICKISCH: And why do you think companies fight this so much still?
ALEXANDRA KALEV: I think there are two issues here. There is the, if you want, the cultural aspect of the resistance and there is the technical aspect of the resistance, which is, yes, you need to be a little bit more creative if you want to manage workforce that has work-life support. You also need to be creative if you want to access new markets, if you want to develop new products. Creativity is part of management.
What we recommend based on our finding are the following things regarding how to manage your work-life programs, as I said earlier, you want to put flexibility and leave policies in writing. Writing also has a symbolic power. It’s not only about things being formal and known, it’s also about workers understand that you take these things seriously. In one professional service firm that we visited, workers said that it wasn’t until the company produced a brochure about flexible arrangements that they started taking it seriously, that they actually believe that the company is behind that.
CURT NICKISCH: Yeah, right, because the inertia isn’t just there for managers, it’s also there for workers.
ALEXANDRA KALEV: Right, or the cynicism. Right? Have your leaders do the messaging. Basically have your leaders talk the language of time off. And you see Zuckerberg does that, right? All the CEOs of Twitter and Reddit, they endorse parental lives by taking them themselves.
So have leaders talk the talk and walk the walk, do the messaging. Start infusing a culture. You want to prepare your workforce for flexibility, for example, cross-training of workers. You can cross-train your workers so that when someone has to take time off, others are ready to step in. And cross-training provides plenty of other knock-on benefits too such as increasing employee retention and making teams more agile in the face of changing demands. So you see that there is synergy here when you prepare a more flexible workforce.
CURT NICKISCH: Let’s talk about one of the signature aspects and maybe places of tension between workers and companies when it comes to work-life balance and that’s children, taking care of children. There is also a spectrum in there if everybody thinks about onsite daycare, but you looked at a lot of other ways that some companies try to split the difference or provide some support even if you can’t bring your child into work with you. What did you find?
ALEXANDRA KALEV: Yeah, so there is a big spectrum, you’re right. And you’re right, childcare is perceived as the most, indeed, expensive and inflexible support. But again, childcare is very useful and not that costly as the myth is about it. First, what we find, again, very surprisingly, is that when companies use referral services, it makes a huge difference for workers.
CURT NICKISCH: Wait, what do you mean by referral services?
ALEXANDRA KALEV: So referral services, these are the most common type of childcare and elder care help. And these are usually online listings with contact information of local care providers, childcare or elder care where openings are regularly updated and licenses are regular regularly updated. So if I have a need, I can go to that list and start looking and save a lot of time putting that list together by myself.
Obviously, the cost of this list is almost nothing but what’s interesting about them is that they not only help workers solve a problem, they also send a message, a signal, that family life and work-life and your work-life juggle indeed are a legitimate part of the conversation here, a natural part of the conversation at work. And that makes a big difference for people to feel that they belong.
CURT NICKISCH: And then, there’s also monetary support for childcare programs, companies, they can offer vouchers or some kind of financial support towards childcare or elder care.
ALEXANDRA KALEV: Yes. Companies that put in place referral services see an increase in the share of White women, Black, Hispanic, and Asian American men, women across the board in their management ranks, so that’s very useful.
CURT NICKISCH: Yeah, it’s kind of amazing. Yeah.
ALEXANDRA KALEV: Yeah. Like in Buddhism, you have to give up very little to increase your happiness a lot. Work-life programs, most of them are really inexpensive and require very little to manage and they give you so much in terms of productivity and in terms of diversity. So I hope this little secret now will become known and implemented more widely to unleash these treasures. Childcare vouchers or childcare centers, indeed they provide a more substantive help for workers, especially non-white workers often have trouble finding dependable, reliable, and affordable childcare, often because they earn much less and they devote a much larger portion of their income for childcare. So help with childcare can make a big difference. Childcare centers can be costly, they’re also not flexible.
CURT NICKISCH: You’re talking about child like onsite childcare centers?
ALEXANDRA KALEV: Onsite childcare centers, yes. Being employers that put in childcare centers, do it after they survey their workers and figure out whether there would be use for these centers for the foreseeable future. Otherwise, a more flexible and a broadly applicable or useful option is childcare vouchers.
CURT NICKISCH: Yeah, I could see vouchers getting more popular now if you have more people working at home.
ALEXANDRA KALEV: Yeah. So they build on the existing infrastructure of other childcare centers. And if you have an onsite childcare center, a low wage employee that earns nine to $11 an hour cannot afford it anyway, but they can use the vouchers, they can use the vouchers to put their kids in a childcare almost of their choice. So you have more flexibility in that.
sAnd you also can offer vouchers for elder care. So you’re more flexible in the kind of support that you give to different workers. And you can also administer your vouchers through flexible spending accounts. So both employers and employees save on payroll taxes and employee save on income taxes. So if you calculate the benefits in terms of retention, productivity, the tax deductions, these things they more than pay for themselves. When companies do put in place, either childcare centers or childcare vouchers, they see significant increases of about 15% for each group in the share of Black women, Hispanic women and Asian American women in their management ranks.
CURT NICKISCH: Yeah, it’s interesting that some of the impacts it had on promoting diversity in management is comparable to popular racial equity programs that companies invest in. How big of a tool in the toolbox do you think this is to increase diversity in organizations?
ALEXANDRA KALEV: What’s interesting is that there is kind of like a dichotomy in managers and diversity experts thinking about who are the underrepresented groups. So there is race and ethnicity and there is gender, and these things are perceived as separate worlds. Right. So work-life is still managed more in HR as a gender policy and less as a diversity policy, and this is why it’s usually not part of the first or second or even third diversity program that a company will implement.
CURT NICKISCH: But your research shows that maybe it should be here, could be.
ALEXANDRA KALEV: It should be, it could be, and it will be highly effective and way cheaper, way less expensive than other diversity programs they put in place. So all diversity programs increase diversity with all the goods that it brings to the company. Work-life support increase diversity and they also increase productivity of all workers.
CURT NICKISCH: What do you recommend to CEOs or other managers to go about implementing better policies? What roadmap might you give them?
ALEXANDRA KALEV: I always start with a survey because presumably, you need to know what your workers need and what your workers perceive as a problem. But really, with work-life support, you can start with flextime and flexible working schedule and you cannot be wrong. You can start with, again, communicating these things, putting them on the book, training your managers and giving your managers the confidence to grant these arrangements to their workers. That would be the first thing to do. Workers thrive on flexibility, they need flexibility without stigma so they can work better, they can hold their job, they can stay more hours. I don’t like to say that because I don’t think workers need to work more, we all are overworked, however, paradoxically, workers work more when they have flexibility, they’re just happier. So yeah, train your managers, go and learn how other companies do it, listen back to this podcast or read the article on HBR, on HBR, there are examples how other companies do it, learn the material and do it at home.
CURT NICKISCH: Alexandra, thank you so much for coming on the show to talk about your research and point the direction for some easy steps to start and some better ways to go.
ALEXANDRA KALEV: Thank you for having me.
CURT NICKISCH: That’s Alexandra Kalev, Associate Professor and Chair of the Department of Sociology and Anthropology at Tel Aviv University. She’s also a co-author of the HBR article, The Surprising Benefits of Work/Life Support.
If you got something from today’s episode, we have more podcasts to help you manage your team, manage organizations and manage your career, find them at hbr.org/podcasts or search HBR in Apple Podcast, Spotify or wherever you listen.
This episode was produced by Mary Dooe, we get technical help from Rob Eckhardt, our audio product manager is Ian Fox and Hannah Bates is our audio production assistant. Thanks for listening to the HBR IdeaCast, we’ll be back with a new episode on Tuesday. I’m Curt Nickisch.